Saturday, November 27, 2004

It’s the arms sales… stupid

On the back of the transport select committee report on the EU’s Galileo satellite navigation system, which we reported in this Blog, today The Daily Telegraph has belatedly covered this issue, albeit in the business section - proving once again that this is the only grown-up section in the newspaper.

Headed, "MPs attack deficiencies in Galileo", Edmund Conway writes that "Europe's planned €3.5 billion satellite project is likely to cost taxpayers far more than expected, and could end up as an 'orbiting Railtrack', according to a parliamentary committee report." The "orbiting Railtrack" is a nice phrase, and one I missed in my original review of the report. Worth remembering, I think.

Anyhow, Conway also tells us that the transport select committee has said it is not yet clear how the Galileo project will benefit European states or the companies using it. It questioned EU assumptions that the project would be more than half-financed by the private sector, and warned that the public-private partnership (PPP) which will build and maintain the satellite may have to be unduly supported by the state.

Elsewhere in the business section is a long feature on Galileo, also by Edmund Conway, which does not seem to be posted on the online Telegraph.

At last the issue is being covered but, unfortunately, the piece is incoherent and unfocused, not least because, like Dunwoody’s select committee, it does not really take on board the military applications of the system. Like Dunwoody, Conway does not see the economic justification for Galileo, and thus suggests that when Alistair Darling goes to the EU’s transport council next month, "he should take one small step for Europe, and quietly let Galileo go."

That is not to say that Conway ignores the military applications. He notes that the EU, failing to attract enough finance from its own resources has sought "other members outside Europe", including China, India, Russia and Ukraine. This, he writes, has brought a response from the US, which has produced "a device which allows to jam the Galileo signal in times of military crisis".

But he does not properly explain why the US should want to do this. He fails to tell us that France, in particular, and Germany are agitating for the EU to lift its arms embargo on China, so that their manufacturers can sell vast quantities of expensive, high tech kit to the PLA, using GPS technology. It is those arms sales that make Galileo an economic proposition, to France and Germany at least, as long as we also help finance the system without demanding a payback, and it is that which is evoking the response from the US.

Furthermore, Conway does not explain that such kit would be useless if it relied on the free-to-users Navstar because the Americans would be able to shut it off if there was a risk that an enemy might use it against them. Thus, while the prospect of billions of euros-worth of arms sales have the "colleagues" slavering in anticipation, Conway fails to tells us that this prospect can only become a reality if the EU can provide a system independent of the US.

Thus, in the first instance, Dunwoody’s committee, in ignoring military applications and their economic potential, has been hoist with its own petard, in failing to see the economic justification of the system. Conway now trails in its wake, half understanding but failing to explain fully what is going on.

Next month, when Darling does go to Brussels, he will meet with formidable pressure to approve the scheme, with any reluctance on his part being cast as another example of Britain being awkward. And there will be no mention of military application. In fact, the denials will continue.

A better piece by the Telegraph would have picked all this up and Conway would be shouting from the rooftops, "It's the arms sales… stupid".